On October 10th LOEB[1] CAPITAL MANAGEMENT filed SEC FORM 13-D which means LOEB owns greater than or equal to five (5%) percent of the outstanding shares of PVSW common stock 853,593 shares (5.16%). Incorporated within said filing was the below letter from LOEB to the Pervasive Board of Directors. Folks, this pretty much vindicates all allegations made on this blog against the PVSW Board of Directors. Class Action litigation is now imminent against the Board from non-insider shareholder(s), and again, damages will include but not be limited to all Directors options awarded cumulative retroactive to 1994 and will seek imprisonment for allegations previously cited.

Loeb Arbitrage Management LP and Loeb Offshore Management LP, together doing business as Loeb Capital Management, and affiliated entities (collectively, “Loeb”) over which it has management discretion are owners of 544,264 shares of the common stock of Pervasive Software Inc. (“PVSW” or the “Company”) as of close of business on August 27, 2012. We are writing this letter to express our concern regarding both the vague language contained in yesterday’s press release from PVSW’s board of directors and the information which was excluded from the announcement. The Company’s disclosure that it has retained Shea & Company, LLC (“Shea”) “to assist and advise” in its evaluation of the proposal received from Actian Corporation (“Actian”) on August 13, 2012, “as well as the Company’s other strategic alternatives, including remaining independent and executing its existing strategic plans” is glaring in its omissions.

To be clear, we view the failure to announce the commencement of a formal process to maximize value for shareholders through a competitive auction process that focuses solely on selling the Company to the highest bidder as a failure to satisfy the fiduciary duty the PVSW board of directors owes to the shareholders of the Company. We acknowledge the retention of Shea; however, given that Shea is not a nationally recognized investment banking firm, shareholders are left to wonder whether the Company is indeed endeavoring to maximize value by selling the Company to the highest bidder. For that matter, the simple fact that the Company avoided mentioning maximizing shareholder value adds fuel to the fire of our concern, as we believe this to be atypical for such an announcement.

In yesterday’s press release, the Company refers to “remaining independent and executing its existing strategic plans” as one of its “other strategic alternatives.” This language is distressing to us as it is consistent with language often used by boards that are entrenched and actively engaged in behavior that is not conducive to maximizing value for shareholders. More troubling to us than the affirmative statements is the absence of a statement of commitment to maximizing value for shareholders. As we have previously discussed, the Actian proposal represents a stock price level that has not been exceeded (or even approached) in over 8 years. Quite simply, the growth of PVSW’s revenues and profits has been anemic and appears unlikely to change in a positive manner. It is our view that the only acceptable alternative involves the Company focusing solely on using the proposal from Actian as a catalyst to maximize value for PVSW shareholders and we are disappointed by the Company’s failure to explicitly state just such a commitment.

Given our concerns, we request a meeting with PVSW’s management team and board of directors as soon as possible but in no event later than September 6, 2012. It is imperative that this meeting occur well in advance of September 15, 2012. [emphasis added]

August 13 Actian Corp makes a public proposal to acquire Pervasive for $8.50/share Six law firms jump in between August 13 and August 16 to investigate the PVSW Board for Breach of Fiduciary Duty, in addition to whether the Pervasive Board of Directors is acting in shareholders’ best interests and whether the proposed consideration would be fair and adequate.

August 27 Pervasive announces retaining Shea & Company LLC "...to assist and advise the Board of Directors in its evaluation of an unsolicited, non-binding proposal the Company received from Actian Corporation on August 13, 2012, as well as the Company’s other strategic alternatives, including remaining independent and executing its existing strategic plans..."

September 12 Pervasive announced "...that its Board of Directors has met to consider the advice of its independent financial advisor, Shea & Company, LLC, with respect to the evaluation of an unsolicited, non-binding proposal the company received from Actian Corporation on August 13, 2012. The Board of Directors has instructed Shea & Company to solicit potential bids from interested parties and engage with those parties, including Actian Corporation, regarding their interest in acquiring Pervasive Software..."

Footnotes

[1] LOEB CAPITAL MANAGEMENT Founded 1931 shortly after the onset of The Great Depression as Loeb, Rhoades & Co (1937-1979) Acquired by American Express in 1981.

PVSW to announce Q1 FY13 numbers [2] Tuesday October 23rd at the close of market.

"...In light of the company’s recently announced process to solicit potential acquisition bids from interested parties, the company does not intend to host the customary conference call following release of earnings results. Financial data typically shared in the conference call will instead be disclosed in the published earnings announcement..." Source: Pervasive, October 19, 2012

This is very significant. PVSW has effectively ipso facto quid pro quo confirmed they will be acquired. No "... including remaining independent and executing its existing strategic plans..." per their Aug 27 release (above).

Note: Per comment #1 above the PVSW Board not only chose not to hold a conference call but they also explicitly state on their Q1 FY2013 formal disclosure "...There can be no assurance that the board's continued consideration of the Actian proposal or any alternative proposals that Pervasive may receive from any other parties will result in a transaction with Actian or any other party..." Note said statement below also blatantly gave the finger to Gideon King, Loeb, all Law Firms involved with Actian's proposed buyout concerned with fiduciary duty, and most importantly, all PVSW non-insider shareholders. This is a very very disturbing development.

"We executed well in the September quarter, resulting in our 47th consecutive quarter of profitability," said John Farr, president and CEO, Pervasive Software. "I'm particularly pleased with our execution this quarter given the potential for disruption related to the unsolicited proposal we received in August and the related announcements and activities since then. Our database and integration products represented approximately 64% and 32%, respectively, of our total revenue while our Business Xchange and Big Data & Analytics products made up the remainder..."

On September 12, 2012, Pervasive announced that its board of directors met to consider the advice of its independent financial advisor, Shea & Company, LLC, with respect to the evaluation of an unsolicited, non-binding proposal the company received from Actian Corporation on August 13, 2012. The board of directors instructed Shea & Company to solicit potential bids from interested parties and engage with those parties, including Actian Corporation, regarding their interest in acquiring Pervasive Software. Shea & Company has contacted multiple potential bidders, and Pervasive has executed confidentiality agreements with and given presentations to a number of those potential bidders who have expressed interest. This solicitation process will continue over the course of the coming weeks or months depending on multiple variables. In light of this ongoing process and as communicated on October 19, 2012, the company is not hosting the customary conference call following today’s earnings release. There can be no assurance that the board's continued consideration of the Actian proposal or any alternative proposals that Pervasive may receive from any other parties will result in a transaction with Actian or any other party. Subject to applicable laws, currently the company does not intend to provide further updates regarding the board's consideration of these matters..." [emphasis added]

June 4-22 Mike Hoskins, CTO and Board Director Dumps > $1M common stock days before end of F2012 ending June 30.

June 15 PVSW short position 23,758 shares

June 29 PVSW short position 559,704 shares

July 24 Pervasive announces Q4/FY 2012 Revenues/Earnings. "...With $49 million in annual revenue we achieved our best annual revenue result in the last eight years..." -John Farr, July 24, 2012.

Note: Year 1 (2005) of "eight years" John Farr is referring to, Pervasive generated $48.4M in revenue. That comes out to a .23% annual increase over those eight years to finally reach $49.2M for Fiscal 2012. John Farr should have been removed for cause immediately after the conference call

August 13 Actian Corp makes a public proposal to acquire Pervasive for $8.50/share Six law firms jump in between August 13 and August 16 to investigate the PVSW Board for Breach of Fiduciary Duty, in addition to whether the Pervasive Board of Directors is acting in shareholders’ best interests and whether the proposed consideration would be fair and adequate.

August 26 Loeb Capital Management, 13D shareholder, send letter to PVSW Board stating "...To be clear, we view the failure to announce the commencement of a formal process to maximize value for shareholders through a competitive auction process that focuses solely on selling the Company to the highest bidder as a failure to satisfy the fiduciary duty the PVSW board of directors owes to the shareholders of the Company..."

August 27 Pervasive announces retaining Shea & Company LLC "...to assist and advise the Board of Directors in its evaluation of an unsolicited, non-binding proposal the Company received from Actian Corporation on August 13, 2012, as well as the Company’s other strategic alternatives, including remaining independent and executing its existing strategic plans..."

September 12 Pervasive announced "...that its Board of Directors has met to consider the advice of its independent financial advisor, Shea & Company, LLC, with respect to the evaluation of an unsolicited, non-binding proposal the company received from Actian Corporation on August 13, 2012. The Board of Directors has instructed Shea & Company to solicit potential bids from interested parties and engage with those parties, including Actian Corporation, regarding their interest in acquiring Pervasive Software..."

June 4-22 Mike Hoskins, CTO and Board Director Dumps > $1M common stock days before end of FY2012 ending June 30.

June 15 PVSW short position 23,758 shares. PVSW closes at $6.80 on 38,300 shares volume.

June 29 PVSW short position 559,704 shares. PVSW closes at $7.49 on 55,900 shares volume.

July 24 Pervasive announces Q4/FY 2012 Revenues/Earnings. "...With $49 million in annual revenue we achieved our best annual revenue result in the last eight years..." - John Farr, July 24, 2012.

Note: Year 1 (2005) of "eight years" John Farr is referring to, Pervasive generated $48.4M in revenue. That comes out to a .23% annual increase over those eight years to finally reach $49.2M for Fiscal 2012. John Farr should have been removed for cause immediately after the conference call

August 13 Actian Corp makes a public proposal to acquire Pervasive for $8.50/share Six law firms jump in between August 13 and August 16 to investigate the PVSW Board for Breach of Fiduciary Duty, in addition to whether the Pervasive Board of Directors is acting in shareholders’ best interests and whether the proposed consideration would be fair and adequate.

August 27 Pervasive announces retaining Shea & Company LLC "...to assist and advise the Board of Directors in its evaluation of an unsolicited, non-binding proposal the Company received from Actian Corporation on August 13, 2012,as well as the Company’s other strategic alternatives, including remaining independent and executing its existing strategic plans..."

August 28 Loeb Capital Management, 13D shareholder, sends above letter to PVSW Board stating "...To be clear, we view the failure to announce the commencement of a formal process to maximize value for shareholders through a competitive auction process that focuses solely on selling the Company to the highest bidder as a failure to satisfy the fiduciary duty the PVSW board of directors owes to the shareholders of the Company..."

September 12 Pervasive announced "...that its Board of Directors has met to consider the advice of its independent financial advisor, Shea & Company, LLC, with respect to the evaluation of an unsolicited, non-binding proposal the company received from Actian Corporation on August 13, 2012. The Board of Directors has instructed Shea & Company to solicit potential bids from interested parties and engage with those parties, including Actian Corporation, regarding their interest in acquiring Pervasive Software..."

June 4-22 Mike Hoskins, CTO and Board Director Dumps > $1M common stock days before end of FY2012 ending June 30.

June 15 PVSW short position 23,758 shares. PVSW closes at $6.80 on 38,300 shares volume.

June 29 PVSW short position 559,704 shares. PVSW closes at $7.49 on 55,900 shares volume.

July 24 Pervasive announces Q4/FY 2012 Revenues/Earnings. "...With $49 million in annual revenue we achieved our best annual revenue result in the last eight years..." - John Farr, July 24, 2012.

Note: Year 1 (2005) of "eight years" John Farr is referring to, Pervasive generated $48.4M in revenue. That comes out to a .23% annual increase over those eight years to finally reach $49.2M for Fiscal 2012. John Farr should have been removed for cause immediately after the conference call

August 13 Actian Corp makes a public proposal to acquire Pervasive for $8.50/share Six law firms jump in between August 13 and August 16 to investigate the PVSW Board for Breach of Fiduciary Duty, in addition to whether the Pervasive Board of Directors is acting in shareholders’ best interests and whether the proposed consideration would be fair and adequate.

August 27 Pervasive announces retaining Shea & Company LLC "...to assist and advise the Board of Directors in its evaluation of an unsolicited, non-binding proposal the Company received from Actian Corporation on August 13, 2012,as well as the Company’s other strategic alternatives, including remaining independent and executing its existing strategic plans..."

August 28 Loeb Capital Management, 13D shareholder, sends above letter to PVSW Board stating "...To be clear, we view the failure to announce the commencement of a formal process to maximize value for shareholders through a competitive auction process that focuses solely on selling the Company to the highest bidder as a failure to satisfy the fiduciary duty the PVSW board of directors owes to the shareholders of the Company..."

September 12 Pervasive announced "...that its Board of Directors has met to consider the advice of its independent financial advisor, Shea & Company, LLC, with respect to the evaluation of an unsolicited, non-binding proposal the company received from Actian Corporation on August 13, 2012. The Board of Directors has instructed Shea & Company to solicit potential bids from interested parties and engage with those parties, including Actian Corporation, regarding their interest in acquiring Pervasive Software..."

Shea and the Pervasive Board failed to find buyer(s) outside Actian's arguable self-proclaimed hostile takeover at absurd price of $9.20/share. Said failure confirms either alleged collusion and stock fraud or confirmed alleged stock fraud, collusion, and criminal gross negligence on the part of Pervasive's Board of Directors.Said failure further confirms Pervasive had no IP given the absurdly low offer price, Pervasive's cash position, and Pervasive's lead in Big Data. If not, then what was Actian purchasing? Why were they so determined to acquire when [seemingly] no one else was interested? Was their collusion on the part of Actian and Pervasive? Note: Pervasive failed to materially increase revenues since 2004. Pervaise Board also issued tens of thousands additional shares to its Board in December 2012, DURING SAID ALLEGED HOSTILE TAKEOVER. The Pervasive Board and Senior management were simply infested by alleged fraud where Pervasive became nothing more than a personal ATM for said insiders as confirmed by consistent patterns of said alleged fraud as meticulously cited on this blog. (See all references and all comments to said referenced links).